November 8, 2016 Read More →

FirstEnergy Declares Emission-Control Trends a Force Majeure as It Works to Drop Coal Shipping and Supply Commitments

Taylor Kuykendall for SNL Beta:

FirstEnergy Corp. disclosed in a Nov. 4 securities filing that it is fighting a legal battle to declare mercury emissions limits imposed by the U.S. EPA a force majeure event justifying termination of coal transportation and supply contracts.

FirstEnergy reported the first dispute arises from a contract for the transportation of 3.5 million tons of coal annually through 2025 to certain Ohio coal plants. The contract is a deal for transport by BNSF Railway Co. and CSX Corp. FirstEnergy said all the plants covered by the contract were deactivated by April 16, 2015, due to the EPA’s Mercury and Air Toxics Standards.

FirstEnergy also reported it has asserted termination rights effective in 2015 with one of its coal suppliers. In response, FirstEnergy said the supplier commenced litigation alleging it does not have sufficient justification to terminate the agreement. The issue, involving 5.5 million tons remaining under the contract, is currently in the discovery phase of litigation.

Full article: FirstEnergy fighting over long-term coal contracts impacted by MATS

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